For most who are distracted by observing the orchestrated efforts of our Wall Street bankers to destroy the Russian Ruble (which is down some 50-60% against the Dollar), the intentional destruction of the Dollar goes unnoticed.
- It's worth considering the relative financial positions of the US and Russia, and then further thinking about what options Russia might have in its defense.
Strength vs, weakness.
- Russia has $700 million in debt, its debt-to-GDP is ~15%, and it runs a budget surplus.
- The US has $18 trillion in debt, its debt-to-GDP is >100%, and runs a budget deficit.
Options.
- Russia has enough Gold to put the Ruble into a Gold standard, or it could easily issue debt with a redeemable-in-Gold option. This could be the "judo flip" that would completely change the game for Putin and Russia.
- The US can print more FED created debt-money and destroy itself with inflation. This would be the "move" that would have the US eating the mat.
Sunday, 21 December 2014
US-Russian Financial Judo....................from Rico
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1 comment:
Like all things Russian, you have to be able to trust the Russians to actually redeem debt with gold or keep gold backing of the ruble. When you look at other Russian promises it is a poor bargain.
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